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Tuesday, October 11, 2005

Oh, how the music retailers must have celebrated when they finally bullied newspapers into stopping giving away free CDs - their persistant whining about how it was ruining their businesses had finally hit home, and slowly, the labels withdrew their support for the schemes.

The shops were less thrilled to discover that the newspapers just shrugged, and started to give away DVDs instead, eating into a range with a much higher margin. It's like a baker had finally managed to stop the wasps buzzing around his eccles cakes, only to discover they'd instead started to nest in his wedding cakes and fine confectionary instead.

A nasty shock for the shops who - instead of seeing papers fling out the equivalent of £2 1960s compilation CD, had to contend with a £15 Cabaret DVD available for a quid in every corner shop in the land. Terrible times, and the sort of times which call for - yes - HMV's Gennaro Castaldo, sent out to argue that it's just not fair:

HMV is one of several retailers worried that such giveaways will diminish the value of their business.

"DVDs should be aspirational but if you see them being tossed around it sends out a negative message," says HMV spokesman Gennaro Castaldo. "It devalues the medium in the minds of the public."

But doesn't the fact that a DVD can be made for as little as 16p suggest customers are being ripped off in the shops?

Mr Castaldo rejects it as a "facile argument". The cost of DVDs sold in shops reflects the "full costs of creating a film, distribution, marketing and selling it."

"But DVD prices have been coming down a lot recently."

Erm... yes, they have. You could get East is East last Saturday for £1.20, with a free Guardian, TV guide and book review supplement thrown in. Clearly, there's a bit more room for HMV to shift their prices downwards.

We love Castaldo's argument here - you can't give people cheap DVDs because they'll lose their "aspirational value"? What sort of logic is that? Do people really go into shops and try and haggle prices upwards so they can feel better about themselves? "Excuse me, what's the difference betweent the five pound slippers and the ten pound slippers?" "They're identical, pal, except the ten pound ones make you feel a little bit more like you're Prince Edward."

The only plausible reason for pretending that DVDs are luxury items is so that they can go on charging luxury prices for them - if you actually cancel down Castaldo's argument, he's saying "if we don't make people pay through the nose for this product, they might stop paying through the nose for the product".

And, well, it is true that a new release DVD might have its owners wanting to still top up the costs of producing the movie in the first place - but something like Cabaret was made in 1972. Presumably Cy Feuer isn't still fielding phonecalls from the cameramen saying "Look... when do you think you might be able to pay us for our work? It was thirty-three years ago now..."